Americans are not Australian – growing an Aussie tech company in the US

Most of the Australian tech companies in which I have invested are looking to expand globally, and the US is generally top of the list. They are either already attacking the US market or planning to enter over the next couple of years.

Aconex was already an international business, with offices in Asia, the Middle East and Europe, when we set about building our US business, but success there required a further shift in our mindset. We had created a solid global culture but in the US we needed to have a strong, local American presence.

Our experience, of course, was gained from an Australian context but much of what follows can be applied to a start-up entering the US market from just about anywhere.

Australian tech companies must go global

Almost every Australian technology business needs to go global as the Australian market is just not large enough to build big tech companies.

The US is often seen as the most attractive global market, but don’t assume it should be your first geographic expansion. The UK, other countries in Europe, hubs like Dubai and Singapore, and some large Asian countries can also be attractive for expansion. They all present their own challenges, but not on the same scale as the US, so it can help to build your global DNA in some of these other markets first.

At Aconex we did not go to the US first. We prioritised other large construction markets, initially opening offices in London, Hong Kong and Dubai (which was booming at the time), out of which we built significant regional businesses. We extended our global office network to more than a dozen cities before establishing a limited operation in the US, initially just to develop and maintain relationships with large American asset owners developing projects in other parts of the world.

As we took those first steps into the US, we realised that there were few strong, local competitors and we had a clear market opening for the Aconex product. We decided to focus our investment on this opportunity and a couple of years later, half our executive team, including me, were based in the US and it had become our core growth engine.

When considering your international expansion strategy, you have to be clear about where you will focus your investment, time and effort. Identify the markets that most closely align to your purpose and achieving your vision. Understand the similarities and differences in customer segments relative to Australia. Review the product market fit and assess the competition. Make sure there are buyers for your product and that you can differentiate, not just against direct competitors, but also against the adjacent players. Finally, ensure that the go-to-market plan you used in Australia can work, or that the changes needed are well understood, limited in number and manageable.

Building our US business was a multi-year learning curve for us, as individuals and as a management team. For me, there were five key lessons as well as countless tips picked up along the way:

Be prepared to invest … heavily

Among all the things you don’t know at the outset, you can be certain that building a US presence will take longer and cost more than you think. Even with the benefit of all you have learned in Australia, replicating that success outside your home market can be a long, hard journey. You’ll need to have the capital – and access to future capital – to stay the course.

Time is the other investment you need to be prepared for. While you undoubtedly faced challenges in the early days in Australia – think product immaturity or trial and error in your go to market strategy – having the single-minded attention of the founding team can pull you through. As you venture overseas, that attention will be split between international expansion and your home market that is paying the bills.

Focus!

The US is a huge market. You don’t need to win it all to build a strong, defensible position. The market is so much bigger than Australia that even a subset of your current customer base can underpin a massive business.

Avoid the early Aconex mistake of trying to do it all. We were not as disciplined in the early years as we should have been in selecting our target segments in new markets. In Australia we served almost every type of construction project, including large and mid-market commercial developments, retail, high-rise residential, infrastructure (road, rail, airports and hospitals), and mining, oil and gas. This made sense given our domestic market strength in a small market. We had a rapidly growing user base as people took Aconex from project to project as they moved, creating a strong network effect across multiple sectors.

In the US market, we initially tried to take the same approach but found we were too thinly spread and couldn’t reach the tipping point to efficiently build a solid user network. It was only when we focused on the segments where we had the greatest competitive advantage – infrastructure, mining, oil and gas – that growth really took off.

Even within these segments, we decided there was a need for further focus. So, we identified the top 100 contractors and asset developers globally – many, of course, were headquartered in the US – and set a goal to achieve at least an initial sale to all of them within three years. This was a significant change to the way we operated and from that point on it drove our decision-making, not just in sales and marketing but in how we prioritised product development and how we resourced and skilled up our customer support teams. We named the initiative “The Big Focus” (perhaps not such an inspired name in hindsight!) and tracked our progress on boards in all our main offices, on which we added magnetic logos for each new client.

It is hard to imagine how we could have succeeded in the US had we not forced that level of focus on ourselves and right across the business. So, think about how you will target your customers by segment and region to drive that initial focus. Pick a subsegment of the US market where you are genuinely differentiated from your competitors. Then identify a region where those target customers are concentrated: New York for property or finance; Texas for oil and gas; Denver for mining. With California, Texas and the Northeast all individually much bigger markets than Australia, assuming you have strong product market fit, there will be more than enough demand to establish a large successful US business.

Build a global team

I have written before about the importance of building a strong leadership team, establishing a common culture, and so on. These become even more important as you move into international markets. Whether the US is your first foray or the latest on your list, there are several things you can do in this area.

Global leadership

If the US is to develop into a significant business, as opposed to just an overseas office, you will need to base senior executives there. This will often mean the relocation of one or more of the founding team. In our case, Rob had spent time in London during the early years of Aconex. I then relocated to Silicon Valley to support our US focus and before long, other key global roles including our CMO, CFO and COO were based there too. While leaving your senior leaders in Australia might be a workable strategy for other overseas markets, you can’t do that and expect to win in the US.

The approach we used was to establish a beachhead by moving our Melbourne-based head of marketing to San Francisco. This allowed us to set up an office, recruit some local roles and – helpfully – transition our marketing thinking from expanding an existing customer network in Australia and other strong markets to how to generate rapid growth in a greenfield setting within the US.

Over time we also relocated staff between teams on short- or long-term assignments. This meant giving Australian staff the opportunity to spend time in the US, which helped with knowledge transfer to the newer US team. But the benefits flowed both ways, as many Australia-based head office staff were connected to the US business as it grew and avoided thinking in a legacy “Australia only” approach.

Build a common global culture

We were fortunate to have a well-established company culture before we tackled the US. It was Australian-based in many respects, built on openness, a lack of hierarchy, direct communication styles, and a “no BS” attitude. We found that it appealed to potential hires in many parts of the world and served us well, with only a few tweaks, over the years.

We were aware that US workplaces tended to be more formal and rigid than in Australia and that Aussie humour (like sarcasm) doesn’t always travel that well. But I felt we were always able to maintain the best parts of our direct and informal Aussie style of working together, without crossing any lines.

Hire Americans

Hiring locals is good advice no matter what country you are doing business in, and the same applies to the US. There are many reasons to hire American staff. While Australians tend to be well received there, customers are more likely to buy from locals, who can also bring with them market knowledge, relationships and credibility that will otherwise take time to build.

Play to each country’s strengths

Building a business in the US gives you the option to locate head office functions there when it makes sense. For example, I believe Americans marketers are generally more experienced and better trained than Australian marketers. We took the opportunity to create several global marketing roles there, finding a strong talent pool, using digital marketing tools that were not widely used in Australia at the time, and honing our messaging by being close to key US customers.

We also embedded a standard American sales model and processes, which made it easier to hire and onboard salespeople.

We continued to run most of our software development from Australia for many years – we had a strong team there and a relative cost benefit. But eventually we took advantage of an acquisition in the US to build a dev team in San Francisco as well.

Bring US experience onto your board

One way to rapidly step up your company’s understanding of the US market is to augment your board with Americans bringing relevant US experience in your industry, in venture capital and in advisory services such as legal and financial. After the investment of Francisco Partners, five of our seven board members were based in the US. This wide experience in the local market was invaluable for reviewing our strategic fit in the US and for providing expert input into our go-to-market planning and support operations.

Get people together and working as one

I talked about the importance of meeting face to face in this blog post on returning to the office post-COVID. The same rationale applies (COVID permitting) in bringing people together in an international business. Even though travel is expensive, time together as a global team is critical so it must be an essential part of your investment in the US. At Aconex our board would meet face-to-face at least twice a year (often more), our executive team met two to three times a year for strategy and planning offsites, and we’d bring our functional teams together globally every 12 to 18 months.

As well as physical travel, aligning processes and communications across the entire business, and even simple things like cross-regional teams working together on weekly video calls, will build a more cohesive global team and help you work together as one company.

As your US business scales, recognise that there is now no HQ.

If you get to the point that your leadership team is split between, say, Melbourne and San Francisco, the ‘home’ office needs to understand that they are no longer the sole hub supporting the spokes. To be successful in the US, the centre of gravity needs to move out of Australia and key decisions should no longer be made there alone. We used to joke that our HQ at Aconex was seat 24A somewhere over the Pacific (it certainly wasn’t seat 1A – we weren’t flying business class when we were building in the US!).

We also made every effort to connect and strengthen cross-regional leadership teams. It led to some inefficiency with decision-making but it was critical that the US team be included in the decisions that affected them, and that their voice was heard more broadly within the business.

Understand customer differences

It may seem obvious, but it’s important to understand from the start how American customers differ from your Australian customers.

You should go to some lengths to understand:

• Who are the decision makers for your product within customer organisations?

• How do they buy or make purchasing decisions?

• How do they perceive their problems and the available solutions?

• And how will you communicate your product’s unique selling propositions and value in the way the customer will engage with most easily?

In the case of Aconex we found that, while Australian customers valued the benefits of the team collaboration on a project, Americans were more hard-edged and much more interested in maintaining control of their project. This took time to work out but, once we did, it made a difference to how we positioned, marketed and sold the product. It underlines the importance of having senior leaders in the US, interacting with customers and with the ability to challenge the accepted wisdom from other regions.

Localise everything

Day to day most Americans only deal with American companies. To make it easy for your customers, you need to look and act like a locally based business. So, localise everything you can, as soon as possible:

• Starting with the website, it should have a US version that will localise for US visitors. Customer references, case studies, video testimonials, imagery, customer logos, and everything else on your website should be US-related.

• All your core support materials – sales presentations, customer support documentation, videos etc – should also be localised.

• Use American English in everything. Australians get that “optimize” is the US spelling, while many Americans will see “optimise” as simply incorrect.

• Use a US mobile. An overseas mobile number will confuse some of your customers.

In the same vein, adapt job titles to what is locally understood. While there is alignment on C-level roles, no one there knows what a Managing Director or a General Manager is or does. Titles like Vice President (VP), Senior Vice President and Executive Vice President may not roll off the Australian tongue, but they are necessary to attract good candidates and to position your staff correctly.

Finally, some tactical tips

As well as these five key lessons, some other points to keep in mind:

• I found Americans to be more hierarchical than Australians. While not short of confidence, you may have to encourage staff to debate with and push back on the CEO and other executive – something that is rarely an issue here in Australia! And I learned that American executives generally didn’t like other managers interfering with their function – for example, commenting on it in executive meetings or “dipping-in” to work cross-functionally with members of their team.

• Speaking of being confident, it can be difficult when hiring Americans to unpack how strong a candidate actually is. I found candidates at all levels were very articulate and presented well, really talking up their background and experience. So initially everyone seemed great. The main thing is to be prepared to probe deeper with questions.

• Americans (perhaps more specifically Americans in Silicon Valley) will often apply a “playbook” – a standard or systematised way of doing things based on prior experience. For example, marketers might want to apply the “SaaS marketing” playbook. This can be helpful as you don’t have to reinvent the wheel and you want to hire people who know what they are doing. However, you’ll need ensure that the elements of the playbook – strategy, initiatives and processes – align to your company’s overall strategy and support your go-to-market approach. It’s worth reviewing this from first principles.

• Remember that American language and humour can be different. They don’t often use sarcasm and they certainly don’t make fun of each other as much as Australians do. And, while we are exposed to American language all the time, some of our words and phrases (think ‘fortnight’, ‘corridor’, or ‘spitting the dummy’) will be met with blank stares.

• Step up the “rah-rah” factor in your internal communications. While Australians might call BS on too much rah-rah, if your communication is too understated, as it might be in Australia, it will not energise the American team.

• Design your employee share option plan (ESOP) to ensure that tax treatment is optimised for both Australian and the US and get tax advice to help structure relocation packages.

• You’ll need a strong private health insurance plan for staff in the US. This is expensive.

• Plan internal meetings proactively around different time zones and vary the early morning and late evening calls across the team, so that the burden of out-of-hours calls are evenly spread.

The question of time zones was a particular personal challenge for me when I was living in the US but with a big team back in Melbourne. Family was impacted too. After the weekend, Melbourne would come online on Sunday afternoon US time. I had to learn to set some boundaries, either planning to be working on Sunday afternoon or setting expectations with the team back in Melbourne. Sometimes I’d plan to get away early on Friday just to have a bit more of a weekend if I knew I was needed on the Sunday.

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Winning your market in the US is a huge prize. It will set your company up for global success and create significant value for shareholders. However, it is a hard road, it needs a commitment to material investment over the long term, substantial personal and corporate perseverance, and a clear understanding that the US is not Australia. Go in eyes wide open.